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Confederation of Indian Industry Anti-Counterfeit Packaging Technologies A strategic need for the Indian industry

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Confederation of Indian Industry

Anti-Counterfeit Packaging TechnologiesA strategic need for the Indian industry

“ All information contained in this booklet has been obtained from sources believed to be accurate by CII. While reasonable care has been taken in its preparation, CII makes no representation, express or implied, as to the accuracy of the information. All information should be considered solely as statements of opinion”

Copyright : Confederation of India Industry - August 2009.

Confederation of Indian Industry

Anti-Counterfeit Packaging TechnologiesA strategic need for the Indian industry

249-F, Sector-18, Phase - IV, Udyog Vihar, Gurgaon - 122015, INDIATel : +91-124-4101044 / 40144060-67 • Fax : +91-124-4014057

Email : [email protected] • Wesbite : www.cii.in

A Study Report by :Rajiv Dhar

Director - Indian Institute of Packaging

ACKNOWLEDGEMENT

This study report was researched and compiled by Dr. Rajiv Dhar, Director, Indian Institute of Packaging for CII.

The primary objective of this report is to provide the industry member organizations a robust reference

document for selection and effective implementation of technology solutions to combat counterfeit menace.

Dr. Rajiv Dhar Director, Indian Institute of Packaging is also the Chairman, Education and Member on the board

of World Packaging Organization and Chairman of Bureau of Indian Standards Technical Committee apart from

being a member of various other national and international committees and organizations. Dr. Dhar with his rich

experience of over 2 decades in the areas of operations, logistics and engineering has been able to provide a

holistic perspective on combating counterfeit menace through this study report.

We are very grateful to Dr. Dhar for agreeing to research and compile this very important report for CII.

Dr. Dhar can be contacted on [email protected]

Comments and requests for additional copies (including electronic versions) of this document may be sent to:

Anjan Das

Senior Director

Confederation of Indian Industry

249-F Udyog Vihar

Sector 18, Phase IV

Gurgaon 122 015, INDIA

Email: [email protected]

TABLE OF CONTENTS

Foreword 1

1. Introduction 2

2. Strategic viewpoint- within packaging-paradigm 3

3. Anti counterfeiting strategy- A case for interdisciplinary approach 4 - 8

4 Problem statement and assessment 9 - 14

4.1. Harmonised definition for counterfeit product

4.2. Magnitude and Market structure for counterfeit products

4.3. Anti-counterfeit Packaging- End use market share and investment decision

4.4. The scope of products being counterfeited

4.5. Government/Business initiatives to combat Counterfeiting & Piracy

5. Anti-Counterfeiting Technology Solutions 15 - 36

5.1. Technologies: Usage criteria

5.2. Existing Technologies: Options

5.3. New Packaging Technologies: Options

5.4. Anti-counterfeit Packaging- End use market share & investment decision

6. Comparison of current anti-counterfeiting technologies 37 - 40

6.1. Comparison: Products based on end Markets

6.2. RFID in Packaging: Applications with system range

6.3. Technology comparison.

6.4. Choice of anti-counterfeit solutions with different levels of Packaging

7. Anti-counterfeiting strategies 41 - 42

7.1 Anti-counterfeiting business strategy-A must

7.2 Understanding the levels of packaging for the product

7.3. “Building block” system for anti-counterfeiting

7.4. Internal anti-counterfeiting business units and Policies

7.5. Anti-counterfeiting strategies for vendors and contract manufacturers

7.6. Education strategies for Consumers, Patients, Doctors and pharmacists

8 Main conclusions and recommendations 43 - 47

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

© Confederation of Indian Industry

Tables

Table: 1. World Packaging consumption by end use markets 2003-2009 (US $ million)

Table: 2. Indian Packaging by end-user sectors 2003-2009 (US $ million)

Table: 3. World Forecast market for Brand security technologies 2005-12 ($ million)

Table: 4. Choice of anti-counterfeit technologies based on end markets needs

Table: 5. Packaging applications as a function of typical RFID range employed

Table: 6. Advantages /disadvantages Overt technologies

Table: 7. Advantages /disadvantages Covert technologies

Table: 8. Advantages /disadvantages Forensic technologies

Table: 9. Advantages /disadvantages Serialization and Track and Trace technologies

Table: 10. Anti-counterfeiting technologies favorable at different packaging levels

Table: 11. Recommendations

Figures

Fig: 1. Y 2009 on line Pharmacy host locations

Fig: 2. Partnership Trust Trio

Fig: 3. End user market share (value terms) in Packaging business -World (Y 2009)

Fig: 4. End user market share (value terms) in Packaging business- India (Y 2009)

Fig: 5. Technology classification on the basis of usage features

Fig: 6. Classifications of auto identification systems

Fig: 7. Classification based on current technologies

Fig: 8. Brand triad.

Pictures.

Pic: 1. Checquered board feature as an overt feature

Pic: 2. External and internal tamper evident features

Pic: 3. Encrypted text visible under special light as a covert feature

Pic: 4. Forensic Markers

Pic: 5. Mass Serialization

Pic: 6. Nano-print on substrates

Pic: 7. Nano-print on tablets

Pic: 8. RFID tags

Pic: 9. Auto identification of tags and barcodes with scanners, readers and phone

Pic: 10. Special grade of paper used as label stock

Pic: 11. Tear tape applied as a security feature on a corrugated box

Pic: 12. A liner carton

Pic: 13. Void leaves mark when tampered / removed

Pic: 14. Holographic Labels - options

Pic: 15. Digital Watermark – options

Pic: 16. Ink-jet coded bottle

Pic: 17. 2-D Barcode

Pic: 18. A Barcode

Pic: 19. Complex graphic image printing

Pic: 20. Metallized substrate with unique color options

Pic: 21. Image embedded on transparent or metallized substrate

Pic: 22. Microtext print

Pic: 23. Interference graphic print

Pic: 24. Forensic Print

Pic: 25. Product authentication cum track-n-trace

Pic: 26. Combination of anti-counterfeit solutions

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

© Confederation of Indian Industry 00

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

© Confederation of Indian Industry 1

FOREWORD

With the current threat of product counterfeiting taking endemic proportions, brand protection and security are

crucial elements in global industry's fight against this pervasive threat. Analysis by OECD (Organization for

Economic Co-operation and Development) indicates up to US$200 billion of International trade could have been

in counterfeit or pirated products in 2005 where as Pira International reported an estimated loss to world trade

due to counterfeiting and piracy to be almost $521.6 billion in 2006. Today, the menace of counterfeiting

knows no borders, affecting corporations, governments, consumers and entire nations.

That is why we need both countrywide and industry-level cooperation, as well as public and private sector

collaboration, to detect and decisively combat counterfeiting activity. A truly integrated approach, involving key

stakeholders such as global, national and local law enforcement bodies, NGOs, technology solution providers

and corporations, can pave the way for the development and implementation of strategies to stop

counterfeiting in its tracks.

The strategic deployment of technology solutions can help secure a brand or product and also help build

integrity within a supply chain. To explore this issue in depth, CII has issued a new report, “Anti-Counterfeit

Packaging Technologies - A Strategic Need for the Indian Industry.” This report provides insight into

counterfeiting and the spectrum of solutions that could be effectively used by a wide range of organizations to

combat its effects.

CII engaged the services of Dr Rajiv Dhar, Director, Indian Institute of Packaging, who is an expert in the field of

counterfeiting research and linking its root causes with a variety of anti-counterfeiting technology measures,

such as packaging innovations. I believe that that this report will be a valuable reference document and enable

us to take meaningful steps in protecting our brands and products, and in turn help consumer's access genuine

goods.

All of that is in line with the CII's ongoing endeavor to provide a sustained value proposition to Indian industry. I

offer my appreciation to CII and Dr Rajiv Dhar for publishing this important report.

Shanker Annaswamy

Chairman, CII National Committee of IP Owners &

Managing Director - IBM India Private Limited

1. INTRODUCTION

Liberalization of economies across the globe has brought packaging technology to the forefront. Packaging

being pervasive, in today’s business plays an important role and each member in the supply chain looks forward

‘to use packaging as a strategic tool for business development and improved business performance 1under the present and future needs’ .

The scope of packaged products has broadened from luxury watches and designer clothing to include items

which impact directly on personal health and safety — including food, pharmaceutical products and automotive

replacement parts in fact everything we consume. Packaging also helps in creating the successful brands that

becomes company’s greatest single assets. Counterfeit packaged products as commonly understood means

producing products and packaging similar to the originals and selling the fake as authentic products.

Counterfeiting with reference to packaging is not a problem in isolation; it is the part along with: Duplication -

i.e. copying labels, packaging, products, instructions and usage information, Substitution - placing inferior

products in authentic or reused packaging, Tampering - by altering packages/labels and using spiked, pilfered,

or stolen goods in place as real. Together with Diversion and the Returns and Warranty frauds they are

addressed as Brand Theft.

Counterfeit is a problem of product security. Other type of improper products can be considered threats to

product security even if not thought of as a traditional counterfeit. Product that is for example, diverted from its

proper distribution channel, or sold after it is out of date, or tampered with by being laced with poison or by

alteration of the package is related to the problem of counterfeiting. Trademark-infringing products may include

correct ingredients in incorrect quantities or may be composed according to a wrong formula. Products can

furthermore contain non-active or even toxic- ingredients. Ailments which could be remedied by genuine

products may go untreated or worsen; in some cases this may lead to death. Most purchasers of counterfeit

products are likely to be completely unaware that they have been victimized.

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

© Confederation of Indian Industry 2

1 Carl Olsmats, “The business mission of Packaging”, Abo Akademi University Press 2002.

2. STRATEGIC VIEWPOINT- WITHIN PACKAGING PARADIGM

During 90's in India, the loose marketing of edible oils allowed considerable scope for mixing, adulteration,

misbranding, short weight etc. The outbreak of dropsy in Delhi due to the adulterated mustard oil led to an

unfortunate loss of over 200 precious lives created a shock wave amongst the consumers and became a matter

of grave concern for the Government to restore confidence of consumer and all concerned. There was a general

consensus that suitable packaging is an essential need. Packaging was accepted as a medium for avoiding

contamination and maintenance of hygienic condition, preventing /minimizing quality deterioration besides

conveying the product in convenient unit packs. Delhi High Court order banning the sale of mustard oil in loose

form and the subsequent Edible oil Packaging (Regulation) order were conscious decision taken, having regard

to distinct as well as accepted advantages of packaging. Have such action really been able to overcome the

menace? Certainly not. But what is achieved is making the task of adulterator/ counterfeiter difficult, making

consumer aware and giving him/her certain tell tale indicators to identify a counterfeit, help in creating brands

that assure the quality of a product with the burden on the reputed manufacturer to protect them. However,

today it is amply clear that manufacturers alone can not handle the menace of counterfeits. There is a need for

well established strategies at the national and international levels across product segments and supply chains to

fight this menace.

Not to be confused with values, mission, purpose, vision and goals, strategy is something with “long term” with

a “broad scope” at a “higher level”, but becomes complete only if it is combined with the basic issue which is

to maintain a competitive advantage.

Paradigm proposed by John Wiley and Sons in the year 1997 states “Packaging is a socio scientific discipline

which operates in a society to ensure delivery of goods to the ultimate customer in the best condition

intended for their use”. With this paradigm and among large number of models available to understand, 2analyze and prepare strategies, for the Packaging Industry, the “value chain” concept given by Michael Porter

appears to be the best model. Interpreting Porters concept, it is opined that a company can identify its ability to

compete and accordingly should look at creating anti-counterfeit protections at each of the five primary links

(inbound logistics, operations, outbound logistics, marketing and sales, services) and four supporting structures

(infrastructure, human resource management, technology development and procurement). Paradigm also

suggests considerations from social set up and consumer habits, infrastructure available including product based

are part of the overall strategies.

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

© Confederation of Indian Industry 3

Michael Porter, Competitive Advantage (New York: The free press, 1985).2

3. ANTI COUNTERFEITING STRATEGY - A CASE FOR INTERDISCIPLINARY APPROACH

3During an interesting conference held on Dec 2002 at Mumbai,” Counterfeit Products: Consumer Beware”

some views presented were:

a) By the Industry. Deputy M.D., Tata Tea informed that 65% of total tea sold, is sold as loose tea, which has

some form or other of tampering done to it, Food grade color is added to husk and this mixed with loose

tea. Some tea bags are even re-bagged. A G.M, Legal Affairs HUL, explained how “Fair and Lovely”

became “Flair and Lovely” and spawned another 123 copies of this popular product. He opined that

destruction of spurious stocks has not solved the menace; only vigilant consumer could tackle this

problem. PepsiCo expert while sharing his concern informed that lakhs of bottles of Pepsi are

counterfeited. Either spurious drinks are rebottled in authentic Pepsi bottles or the drinks are sold under

the similar sounding names. “In a case study in Rajasthan he announced there were 65 factories selling

over 40 spurious brands. VP Legal of Nutrine Confectionary brought out that look alike names, identical

copies, old bottles with new labels and spurious refills make him realize that caution while buying is

critical.

b) Views on Judiciary and Law enforcement. A Bombay High Court Judge brought out that the courts have

laid principles which are sufficient to deal with this problem, but fines imposed are small and cases take

too long, so the counterfeiter is free to go back to his old life. He also felt that the business community

had to do more on this count and that special people had to be appointed to follow through wherever

needed. A Joint Commissioner of Mumbai Police brought out “All illegal acts are not the realm of the

police” Counterfeiting is a non cognizable act and so the policemen’s role ends even as it is being

reported.

c) Consumer’s views. And finally the grand old man of Consumerism from Ahmedabad, Mr. Manubhai Shah

had a view to share “If counterfeiting is non cognizable, you are still not helpless. Contact the local

consumer organization; they will fight on your behalf”. Fight for your rights was his plea.

Even after our realization of the magnitude of the menace and possibly better IPR provision, it is quite relevant

to note that the views that were shared almost 7 years ago remains the same even today. Quoting the recent 4views of a leading manufacturer of packaged drinking water “Anti counterfeiting is really a serious issue and

needs a lot of attention. We have used hologram but consumers are not completely with the hologram and it is

too complicated for them or they don’t have the patience to look carefully the messages on the hologram. We

all use what is called the pilfer proof cap however this pilfer proof cap are not too difficult to make in small units

and the unscrupulous manufacturers buy the caps to make counterfeit product. We had developed a break away

seal but we ourselves had great deal of difficulty in ensuring the consistency in quality and the convenience to

the consumer. 3 years ago we started working on the two color cap for our 20 Liter container which required

very sophisticated mould and an expensive molding machine from Larsen & Toubro. We spent more than Rs. 3

Crores and 1½ years time to get the pilot project for our Delhi plant alone. This did work for 2 months but in 2

months time the local engineer’s people developed a two color very deceptively similar cap which consumers

could not differentiate”

Interdisciplinary Approach. Globalization has further compounded the problem. Taking an example where one

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

© Confederation of Indian Industry 4

2

Kiran Gera, Chairperson, FLO, Bombay (Packaging India Journal Vol. 35 No 6 Feb Mar 2003.)

4Mr. Ramesh Chauhan, Chairman, Bisleri. As shared with the author.

Conference: Counterfeit Products Consumer Beware” 02 Dec 2002 by FICCI, FLO at Mumbai. Views as reported by

may know about the intellectual property rights law as it applies to a bottle design in the United States, but

might not have any experience prosecuting similar cases in Cambodia. Or may have experience reducing product

tampering, but not in deterring container theft in international free trade zones. To deal with the complex nature

of counterfeiting, the interdisciplinary approach should reach out to a number of areas to develop insights and

make choice for suitable technologies that can be incorporated through Packaging. It is proposed that the

Interdisciplinary approach should have following components to understand the type of counterfeiters and the

type of counterfeiting and arrive at the means of handling them.

Corporate and Brand owner’s commitment. Many time with the inadequate market intelligence and the belief

that counterfeiting is a criminal act and therefore dealing with it should be in the public domain, makes brand

managers complacent, particularly, when counterfeiting is an insidious industry practice. Recently enacted Indian

law that imposes harsh measures on counterfeiting activities that result in public harm is said to be adding to

this view point. “Adoption of innovative technologies are simply too expensive and will require company to

elevate the price of its drugs which in turn will repel the cost conscious Indian consumer and the prescribing

Doctor’ is another mindset shared by a few decision makers. However, by and large companies are looking

forward to adopting means and remaining one step ahead of the counterfeiters by modifying their packaging

from time to time.

Government Actions. The socio economic fabric of an emerging economy such as ours is more prone to

exploitation and distressing situation for customers, illiteracy and low quality acceptance adds on to the woes of

the poor customers. Significant revenue loss on account of counterfeits should arouse the interest of the

Government in enforcing anti counterfeiting solutions. However, the pressure from the Government for more

aggressive implementation of anti-counterfeiting measures emanates from the fundamental issues around 5consumer safety, economic progress, and even the National image .A national policy paper on the subject is an

urgent need.

International laws, Regulatory framework and compliance. International treaties, bilateral agreements,

covenants, rules and regulations, advisory notes, directives etc. by various National governments may impose

restrictive conditions if the products are not adequately secure. Like European Commission has initiated a

proposal for protecting the products throughout the supply chain -Anti Counterfeiting Trade Agreement (ACTA) 6for discussions with their trade partners . In US, FDA has recommended implementation of supply chain tracking

7for pharmaceutical products in 2004 . State of California (SB 1476) imposes stringent requirements for imports 8and sales of the drugs where it is mandatory to use the anti-counterfeit measures to single item level . The US

Prescription Drug Marketing Act 1987 included key provisions –

a) A requirement that wholesale distributors of prescription drugs who are not authorized distributors

provide a statement of origin, also known as drug “pedigree” to each wholesale distributor. The pedigree

traces each prior sale, trade or purchase of the prescription drug.

b) Section 203 (u) defines ‘ongoing relationships’ to include a written agreement between manufacturer

and wholesaler.

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

© Confederation of Indian Industry 5

5

(ficci.com/media-room/speeches-preentations/2004/apr/apr 21-piracy-navin.htm)

6 IP fact sheet: anti counterfeiting trade agreement. Report from EU

7 Combating Counterfeit drugs: a report of FDA,2004

8 Background and summary of the California e-Pedigree Law.

Special address by Shri Navin Chawla, Secretary, Ministry of Consumer Affairs,2004

c) Section203.50 specifies the fields of information that must be included in the drug pedigree and states

that the information in the pedigree should be traceable back to the first sale by the manufacturer.

FDA Amendment Act 2007 (H.R. 3580-131) – Section 505D Pharmaceutical Security:

2) Standardized Numeral Identifier – implement by March 2010 for prescription drugs from point of

manufacturing and repackaging;

3) Promising Technologies – The standards developed shall address promising technologies, which may include –

(A) Radio frequency identification technology

(B) Nanotechnology

(C) Encryption Technologies

(D) Other track and trace or authentication technologies

A bill, also known as H.R. 4829, states that the Secretary of Health and Human Services, who overseas a number

of U.S. agencies including the U.S. Food and Drug Administration (FDA), "shall require that the packaging of any

prescription drug incorporate (1) radio frequency identification (RFID) tagging technology, or similar track and

trace technologies that have an equivalent function; (2) tamper-indicating technologies; and (3) blister security

packaging when possible."

Washington, D.C., March 16, 2006 - The Electronic Industries Alliance (EIA) applauded President Bush for his

signing of H.R. 32, the Stop Counterfeiting in Manufactured Goods Act, today. The Stop Counterfeiting in

Manufactured Goods Act prohibits the trafficking in counterfeit labels, patches, stickers, hang tags, or

medallions that are unattached to goods. In addition, the bill makes mandatory the forfeiture and destruction of

counterfeit goods, as well as the assets used to produce, package, and distribute them. It also requires the

forfeiture of property and assets derived from counterfeiting

SB 1476 bill. The State of California vide this bill envisages that all packaged medicines pass through a secure

supply chain system and the movement recorded electronically, known as e-pedigree. The law was to take effect

at the beginning of 2009 but under industry’s pressure the date for implementation is postponed by two years.

Anti-Counterfeiting Trade Agreement (ACTA) by the European Commission has initiated a proposal for

protecting the products throughout the supply chain.

Directive 2004/48/EC of the European Parliament on the enforcement of Intellectual Property Rights specifying

in Article 29 – Industry should take an active part in the fight against piracy and counterfeit and preparing a

model code of conduct for all EU nations.

9Summary report of EU while singling out India as the major source of fake drugs confiscated by its customs has

issue special directives raising an alarm at the magnitude of pharmaceutical counterfeiting. With all this and

more happening, need for a continuous effort backed by strategic actions is required by the exporting

companies to not only to maintain their competitive advantage but to remain in business.

Consumer behavior and rights. It is important to note that the counterfeiter either attempt to deceive the

consumer into thinking that they are purchasing the legitimate item, or convince the consumer that they could

deceive others with the imitation. Most of the look alike products get sold because of the ignorance of the

consumers. Many times to grab the best offers, like through internet sales, consumer fail to check the

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

© Confederation of Indian Industry 6

9 Summary of Community Customs Activities on Counterfeit and Piracy. Report of EU Taxation and Customs Union.

authenticity. It is essential that consumer gets what he/she is paying for. The economic compulsions of

consumers especially in rural areas along with their illiteracy and low quality acceptance make them highly

vulnerable. The issue of counterfeit products is a very deep rooted malaise today. It is true that the impact of

spurious products and negative aftermath from their usage, cuts across all segments of the consumers, gender 10included. According to a study increased public awareness is a key tool in combating counterfeiting in

pharmaceutical sector at the patient level.

Distribution and Retailing Both the distributors and the retailers can not afford to loose their reputation by sale

of duplicate products. In case of any mishaps they will be primarily blamed for selling spurious products and this

can end their business or cause heavy losses. Further the dealer or the retailer can also be entangled into legal

hassles in case of any tragedy that may occur due to consumption of spurious products and all the hassles they

have to face for the act they are not responsible for. In general it is imperative that anti-counterfeit measures

adopted consider all the aspects of the LSCM for the product-Company business plans. For an example,

pharmaceutical products may or may not follow a supply path as followed by other retail products. But drugs

typically follow a more disjointed supply chain than other manufactured items, often being sold from one

distributor to other to balance stock levels (as many as 10 distributors or wholesalers may handle a drug before

it finally gets to a retailer or end user). A given distributor may carry upto 40,000 SKU’s. And drugs are often

repackaged within the supply chain. It will not be wrong to state that subsequent to manufacture, packaged

product safety depends on critical supply chain controls.

11Internet sales provide the ability to purchase products on line. A study conducted by OpSec reports that

medicine is counterfeit in over 50% of cases when the drug is purchased from internet sites that conceal their

actual physical address. Such operators work from the unsecured locations as shown at Fig 1. Such retailing in

other consumer products is expected to have its own share of concern.

12 Fig: 1 Y 2009 Online Pharmacy host locations

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

© Confederation of Indian Industry 7

10

11

12 Assessing the risk of counterfeit pharmaceuticals in online market place, A white paper by OpSec Security Inc.

(www.opsecurity.com)

NAFDAC,2006,http://mednet3.who.int

Assessing the risk of counterfeit pharmaceuticals in the online marketplace. www.opsecutity.com

Partnership of industry players. With the views as expressed in this section , it becomes clear that for

effectiveness of using anti-counterfeiting options there is a need to adopt a tightly controlled and monitored

procurement, manufacturing and disposal protocols. A partnership with mutual trust generates security features

where customized substrate in substantial volumes can become very cost effective.

Fig: 2. Partnership Trust Trio

End user

Converter / printer

Materialsupplier

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

© Confederation of Indian Industry 8

4. PROBLEM STATEMENT AND ASSESMENT

4.1 Harmonized definition for Counterfeit product.

Counterfeit packaged products as commonly understood means producing products and packaging similar to

the originals and selling the fake as authentic products. As per Wikipedia, a counterfeit product is an imitation

which infringes upon a production monopoly held by either a state or corporation. Goods are produced with the

intent to bypass this monopoly and thus take advantage of the established worth of the precious product. The

word counterfeit, frequently describes both the forgeries of currency and documents, as well as imitation of

clothing, software, pharmaceuticals, watches, electronics, and company logos and brands. In case of goods it

results in patent infringement or trademark infringement.

However, under the WTO regime a unified definition is necessary for assessment and declaring the packaged 13goods. As such one of the efforts for the sake of international trade the Federal Food, Drug and Cosmetic Act

defines a counterfeit drug as ‘a drug which, or the container or labeling of which, without authorization, bears

the trade mark, trade name. or other identifying marks, in print, or device, or any likeness thereof, of a drug

manufacturer, processor, packer and, or distributor other than the person or persons who in fact manufactured,

processed, packed or distributed such drugs and which thereby falsely purports or is represented to be the

product of, or to have been packed or distributed by such other drug manufacturer, processor, packer, or 14distributor. U.S. law defines counterfeit drugs as those sold under a product name without proper

authorization. Counterfeiting can apply to both brand name and generic products, where the identity of the

source is mislabeled in a way that suggests that it is the authentic approved product. The World Health

Organization provides an elaborate insight on Counterfeit medicines and its menace in its Fact sheet N°275,

Revised 14 November 2006. It reports that Counterfeit medicines are part of the broader phenomenon of

substandard pharmaceuticals – medicines manufactured below established standards of quality and therefore

dangerous to patients’ health and ineffective for the treatment of diseases. The difference is that counterfeits are

deliberately and fraudulently mislabeled with respect to identity or source. Counterfeiting occurs both with

branded and generic products and counterfeit medicines may include products with the correct ingredients but

fake packaging, with the wrong ingredients, without active ingredients or with insufficient active ingredients.

The main issue arising from the World Health Assembly discussions at the Third General Meeting at Tunisia on 3 -

5 December 2008, highlighted the delegations were not ready to support the draft resolution on definition of

counterfeit medicinal product included in legislative principals and risks to imply that many generics could be

regarded as counterfeits. The Assembly proposed a revised definition in legislative document is still under

finalization.

Tamper evidence. There is no official recognized definition followed internationally of what constitutes a tamper

evident closure. The FDA published 21 CFR 211.132, Tamper-resistant Packaging requirements for over the

counter human drug Products. The FDA definition reads:

“Having an indicator or barrier to entry which, if breached or missing, can reasonably be expected to provide

visible evidence to consumers that tampering has occurred.”

Harmonization of the definition of counterfeit product is of utmost importance for international trade for

protecting the image of the industry. For an example it is essential to avoid genuine generic medicines being

considered counterfeit-a term normally associated with illegally produced or supplied medicines that may or may

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

© Confederation of Indian Industry 9

21USC Sec 32(g)14

Combating Counterfeit Drugs: A Report of the Food and Drug Administration Annual Update May 18, 2005 (http://www.fda.gov/oc/initiatives/counterfeit/update2005.html).

13

not conform to quality specifications. India has stressed that a generic or branded medicine not registered in a 15particular country, but available in that country is not a counterfeit, but simply an unregistered product .

4.2 Magnitude and Market structure for counterfeit products

The infringing products are being produced and consumed in virtually all economies,

16Indian market. Delhi’s leading Newspaper carried a story on the scale of fake goods in India. According to

ASSOCHAM (the Associated Chamber of Commerce), fake goods worth Rs. 20,000.00 Crores are being sold in

the Indian market. According to A C Nielsen, 10 to 30 percent toiletries, cosmetics and packaged food are

counterfeit! In another research the International Anti-Counterfeiting Alliance has found that 35% of all the

automotive parts worth about Rs 2000/- Crores, sold in India are fakes. The problem is huge and becoming

bigger and worse. It is difficult to believe that out of the 3.5 Crore watches sold in India, only 1.2 Crore are

produced by the organized sector. That means 65% of the market is either fake or smuggled goods. With the 4th

global ranking in terms of volume and 13th in terms of value Indian pharmaceutical industry is poised to grow at 17average rate of 9% per annum . A highly organized sector with a due importance as India’s first ranker science

based industry. Currently, Indian Pharmaceutical companies produce about 20-22% of the World’s generic drugs

(in value terms) and therefore counterfeiting is a subject that has a great relevance for the industry..

International Markets. Counterfeiting as an inevitable result of Globalization has become a global nuisance in

the recent years and the range of goods subject to infringement has increased significantly. According to the

study of CIB (Counterfeiting intelligence bureau of the ICC, International Chamber of Commerce) counterfeit

goods probably make up to 5-7% of World Trade. A recent report by the OECD indicates that upto 200 bn USD

of international trade could have been in counterfeit and illegally-copied goods in 2005 (2% of World Trade in

2005)

Quantitative analysis carried out by the OECD indicates that the volume of tangible counterfeit and pirated

products in international trade could be up to USD 200 billion out of which the counterfeit drug sales will reach

US $ 75 billion globally in 2010, an increase of more than 90% from 2005 as indicated by The US based Centre

for Medicines in the Public Interest and WHO. This figure does not, however, include counterfeit and pirated

products that are produced and consumed domestically, nor does it include the significant volume of pirated

digital products that are being distributed via the Internet. If these items were added, the total magnitude of

counterfeiting and piracy worldwide could well be several hundred billion dollars more.

Reports from developing countries, especially in sub-Saharan Africa, are extremely rare and do not permit to

draw a realistic picture of a situation that is generally considered to be highly unsatisfactory because of the

weakness of regulatory and enforcement systems and the widespread presence of unregulated distribution and

retail facilities. Apart from the huge differences between regions, variations can also be dramatic within

countries, i.e. city versus rural areas, city versus city. Counterfeiting is greatest in those regions where the

regulatory and legal oversight is weakest. This situation puts rural and the poorer segments of the population at

a particular disadvantage.

Asia is emerging as the single largest producing region for counterfeit products. Enforcement authorities have

15

Vol 14, May 2009, pp 136-240

16 The Hindustan Times dated 17th of July, 2006.

17 IIP 2008 study report "packaging material items used by pharma industry for formulation in the country”

Generic drug industry in India; the counterfeit spin. Nitin Shukla and Tanushree Sangal Journal of IPR

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

© Confederation of Indian Industry 10

stepped up efforts to intercept counterfeit items in international commerce, but counterfeiters and pirates have

the upper hand in light of the enormous volume of goods being legitimately traded and the ease with which

counterfeit and pirated items can be concealed. The difficulty in breaking into established supply chains has

helped to limit counterfeiting and piracy, but there are signs that counterfeiters and pirates are successfully

expanding operations. The Internet has provided an important new platform for increasing sales. Criminal

networks and organized crime are playing a major role in counterfeiting and piracy operations; they are

attracted to the relatively high profits to be made and the relatively light penalties that could be applied if their

operations were detected.

The extent of counterfeiting is impossible to quantify. Currently, the sources of information available include

reports from nongovernmental organizations, pharmaceutical companies, national medicine regulatory and

enforcement authorities, ad hoc studies on specific geographical areas or therapeutic groups, and occasional

surveys. These sources of information emphasize the complexity of making estimations.

4.3 Anti-counterfeit Packaging- End use market share & investment decision

Globally as shown at Table-1, out of overall forecast packaging sales of $ 564 billion in 2009, consumer

packaging markets is expected to account $ 450 billion with remaining $ 114 billion accounted for

industrial/bulk packaging markets. Within consumer packaging, food packaging is the single largest element,

valued at $ 227 billion. This drives the need for technology solutions for the consumer consumption and safety.

Fig 3 indicates a general comparison between end use sectors. With food sector contribution of 40%, cosmetics

3% and pharmaceutical 5 % it is expected that Packaging converters will like to make the investment decisions in

anti-counterfeiting technologies which are of a common nature as far as their use is concerned, unless

converters see a good value realization from a particular sector. Such a scenario is likely to make certain specific

sectoral technologies very costly.

Table: 1. World Packaging consumption by end use markets 2003-2009 (US $ million)

Fig: 3. End user market share (value terms) in Packaging business -World (Y 2009)

In Indian packaging market (Table:2) with an overall forecast packaging sales of $ 13.4 billion in 2009, consumer

2003 2004 2005 2009 CAGR (%)

2004-09

Food 168,219 182,291 190,055 227,156 4.5

Beverage 64,586 68,922 71,166 83,689 4.0

Healthcare 16,944 18,872 19,914 25,468 6.2

Cosmetics 12,464 13,719 14,565 18,491 6.2

Other consumer 69,918 76,063 79,371 94,512 4.4

Other packaging 95,077 99,397 102,022 114,531 2.9

Total 427,210 459,263 477,094 563,847 4.2

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packaging markets is expected to account $ 10 billion with remaining $ 3.4 billion accounted for industrial

packaging markets. Within consumer packaging, food packaging is the single largest element, valued at $ 5.3

billion. This drives the need for technology solutions for the consumer consumption and safety as in the case of

global industry. Fig 4 indicates a general comparison between end use sectors. With food sector contribution of

40% pharmaceutical just 2 %, it is once again evident that technology solutions that have a common application

in various end sectors will have a greater acceptance in the industry. Any specific sector depending technology is

going to be prohibitive for Indian manufacturers.

Table: 2. Indian Packaging by end-user sectors 2003-2009 (US $ million)

Fig: 4. End user market share (value terms) in Packaging business- India (Y 2009)

India has still not reach a stage where packaging converters can be expected to make huge investments in R&D

activities to handle the counterfeiting menace only for a specific sector like the pharmaceutical sector unless

compensated adequately. By and large companies are dependent on the technologies developed globally.

However, many pockets of indigenization and LCA through applied research by SME’ is visible.

4.4 The scope of products being counterfeited

Infringing products are being produced and consumed in virtually all economies. Counterfeiters and pirates

target products where profit margins are high, taking into account the risks of detection, the potential penalties,

the size of the markets that could be exploited and the technological and logistical challenges in producing and

distributing products. On the demand side, consumers either: (i) unwittingly buy counterfeit or pirated products

thinking that they have purchased genuine items, or (ii) knowingly buy lower-priced counterfeit or pirated items.

The degree to which consumers knowingly buy counterfeit or pirated products depends on the characteristics of

the products concerned. For example, consumers who would knowingly purchase counterfeit garments without

any hesitation may have no interest in purchasing counterfeit pharmaceutical products.

Pharma duplication remains the biggest area of concern as it is facing the highest level of threat and the

Sectors 2003 2004 2005 2009 CAGR (%)

2004-09

Food 2336 2609 3028 5302 15.2

Beverages 844 940 1087 1885 14.9

Healthcare 130 148 175 326 17.1

Other consumer 1079 1210 1411 2498 15.6

Industrial 1857 2006 2234 3401 11.1

Total 6245 6913 7935 13412 14.2

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consumer of pharmaceuticals products are the worst sufferers. Liquor is another area, greatly affected by

duplicates. Senior level management teams in FMCG companies are dwelling more and more on security options

available to fight this menace

The products having the monopoly in the form of protection are targeted the most. For example a new drug 18developed over 10 years research work with a cost of $ 1.5 bn /years and priced suitably to recover not only

the cost but make profits before its marketing rights expire. This makes pharma sector the most vulnerable.

Consumer goods especially if they are very expensive or the desirable brands or those which are easy to produce

cheaply have become frequent and common targets

4.5 Government/Business initiatives to combat Counterfeiting & Piracy

Both governments and industry have been actively engaged in expanding efforts to combat counterfeiting and

piracy in international and national contexts. While the efforts have had positive results, counterfeiting and

piracy levels remain high. Governments have strengthened legal frameworks, enforcement efforts and have

launched awareness-raising initiatives. Improved enforcement appears essential to reduce illegal activities further

and well-publicized enforcement actions have a role in reversing the trend. Improving the situation may also

require governments to strengthen their legal regimes yet further, possibly increasing the civil and criminal

sanctions that apply to IP crime. Actions may also be needed to keep the Internet from becoming a more

prominent distribution channel for infringing items. Multilaterally, ways to strengthen the existing framework

and practices to combat counterfeiting and piracy could be explored. Industry has come together at the sector,

cross-sector, national and global levels to develop common and unified responses to counterfeiting and piracy.

Initiatives have been aimed at improving policy, providing technical assistance and enhancing awareness. It has

also begun to devote effort to developing technological solutions to undermine infringing activities.

BASCAP. The Business Alliance to Stop Counterfeiting and Piracy, which was launched in early 2005 under the

auspices of the International Chamber of Commerce, is one of the more recent and comprehensive global

initiatives launched by industry. It seeks to bring firms together to pursue a more unified approach to combating

counterfeiting and piracy. Its efforts include the creation of platforms for exchanging information on the

counterfeiting and piracy situation in different economies and sectors, and for sharing information on effective

brand protection techniques. It also seeks to provide stakeholders with improved information on the efforts

being taken to address issues, with a view towards enhancing co-ordination. At the same time, research projects

are being carried out to provide more effective methods for evaluating the counterfeiting and piracy situation in

different economies. On the public policy front, efforts are being made to more effectively communicate the

economic and social costs of counterfeiting and piracy to governments and the general public. A 2007 BASCAP

Global survey on Counterfeiting and Piracy revealed that industry efforts have mainly focused on initiatives to

develop technologies to combat infringement. Resources have also been directed to aiding enforcement and

improvising awareness, but to a lesser extent.

WHO – IMPACT. In order to mobilize awareness and action in the fight against fake medicines, in February 2006,

WHO created the first global initiative, known as the International Medical Products Anti-Counterfeiting

Taskforce (IMPACT). IMPACT (International Medical Products Anti-Counterfeiting Taskforce) is comprised of all

193 WHO Member States on a voluntary basis and includes international organizations, enforcement agencies,

national medicine regulatory authorities, customs and police organizations, nongovernmental organizations,

associations representing pharmaceutical manufacturers and wholesalers, health professionals and patients’

groups. These groups have joined to improve coordination and harmonization across and between countries so

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18 Generic drug industry in India; the counterfeit spin.Nitin Shukla and Tanushree Sangal Journal of IPR

Vol 14,May 2009,pp 136-240

that eventually the production, trading and selling of fake medicines will cease. The World Health Organization

spearheaded the creation of the WHO IMPACT coalition, which is supported by national medicines regulatory

authorities and Ministries of Health of WHO Member States and a number of other stakeholders. These include:

Interpol, Organisation for Economic Cooperation and Development, World Customs Organization, World

Intellectual Property Organization, World Trade Organization, European Commission, Council of Europe,

International Federation of Pharmaceutical Manufacturers and Associations, European Generic Medicines

Association, World Self-Medication Industry, Asociación Latinoamericana de Industrias Farmacéuticas,

Commonwealth Secretariat, ASEAN Secretariat, International Federation of Pharmaceutical Wholesalers,

European Association of Pharmaceutical Full-line Wholesalers, International Pharmaceutical Federation,

International Council of Nurses, World Medical Association, International Alliance of Patients’ Organizations,

ReMed, Pharmaciens Sans Frontières, the United States Pharmacopeia, German Pharma Health Fund. IMPACT is

helping to disseminate information useful for assessing technologies aimed to prevent, deter or detect

counterfeit medicinal products. This assessment takes into account: a) cost; b) scalability; c) specific country

needs and situations; d) feasibility; and e) regulatory implications. This work has lead to the following

conclusions:

a) There is no “worldwide” applicable technology, different approaches are needed.

b) In developing countries the priority is to strengthen the capacity to tackle the informal trade of

medicines such as street markets, smuggling and other unregulated or illegal activities.

c) Countries should implement technologies appropriate to their situation and prefer those that are

compatible across borders.

d) Although it has been proposed as a promising solution, there are multiple weaknesses in radio-frequency

identification (RFID) (including cost, privacy concerns, logistics throughout the distribution system, etc.).

IMPACT consensus is that full implementation of RFID can only be envisaged in a distant future; as a

consequence, the most realistic alternative to enable tracking and tracing medical products along the

supply chain is the use of two dimensional barcode labels.

e) The working group’s view is that authentication of medicines should only go as far as the pharmacist and

that the burden of verifying that a product is authentic must not fall on patients.

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5. ANTI-COUNTERFEITING TECHNOLOGY SOLUTIONS

Anti-counterfeiting technologies currently available can be classified and explained in different ways. Since

mostly such options are used in combination and their usage varies with the level of packaging, in this study

technologies are identified by the way they are intended to be used as well as currently available for any

packaging design. This is purely with intent for convenient explanation.

5.1 TECHNOLOGIES: USAGE CRITERIA

Fig: 5 Technology classifications on the basis of usage features.

A. Overt (Visible) Features. Overt features are intended to enable end users to verify the authenticity of a pack.

Such features will normally be prominently visible, and difficult or expensive to reproduce. They also require

utmost security in supply, handling and disposal procedures to avoid unauthorized diversion. They are designed

to be applied in such a way that they cannot be reused or removed without being defaced or causing damage to

the pack for this reason an overt device might be incorporated within a Tamper Evident feature for added

security.

Pic: 1. Checquered board feature as an overt feature

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A.1 Tamper evident packaging systems. Some packages are inherently tamper proof, like a tin can hermetically

sealed, an aseptically packed multilayer carton or a vacuum or the retort pack. Other than the tamper evident

system stated elsewhere additional systems are:

a) Film wrappers A transparent film with a distinctive design is wrapped securely around a product or

product container. The film must be cut or torn to open the container and remove the product. Substrates

options include ultra destructible films, voidable films that provides image when removed. solvent

sensitive papers.

b) Shrink seals and bands. Bands or wrappers with a distinctive design are shrunk by heat or drying to seal

the cap and container union. The seal must be cut or torn to remove the product.

c) Breakable caps. Such caps break when an attempt to open it is made. These caps provide external tamper

evidence and can also be combined with the internal seals thereby providing double security.

Pic: 2. External and internal tamper evident feature

d) Sealed tubes. The mouth of the tube is sealed, and the seal must be punctured to obtain the product.

B. Covert (Hidden) Features. The purpose of a covert feature is to enable the brand owner to identify

counterfeited product. The general public will not be aware of its presence nor have the means to verify it. A

covert feature should not be easy to detect or copy without specialist knowledge, and their details must be

controlled on a "need to know" basis. If compromised or publicized, most covert features will lose some if not all

of their security value. For this reason such techniques will not be disclosed in detail in this paper.

Pic: 3. Encrypted text visible under special light as a covert feature

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© Confederation of Indian Industry 16

C. Forensic Markers. There is a wide range of high-technology solutions which require laboratory testing or

dedicated field test kits to scientifically prove authenticity. These are strictly a sub-set of covert technologies, but

the difference lies in the scientific methodology required for authentication.

Pic: 4 Forensic markers

D. Track and Trace Technologies. These involve assigning a unique identity to each stock unit during

manufacture, which then remains with it through the supply chain until its consumption. This identity will

normally include details of the product name and strength, and the lot number and expiry date — although in

principle it may simply take the form of a unique pack coding which enables access to the same information held

on a secure database. (This latter solution overcomes some of the concerns about privacy where the encoded

data can be read at a distance by radio equipment.)

D.1 Serialization

In itself te Track and Trace label may not be immune to copying or falsification, but its security is greatly

enhanced by the inclusion of unique and apparently random serialization, or non-sequential numbering, ideally

at individual item level. If the serialization was sequential, then the level of security would be very low as the

sequence is predictable, whereas "random" serialization using a highly secure algorithm or method of encryption

overcomes this. Individual packs may still be copied, but the database will identify duplicates or invalid serials, as

well as those which have been cancelled or expired, or which appear in the wrong market, or with invalid

product details. There are two main vehicles for the incorporation of unique pack data in order to facilitate

automatic data capture:

Pic: 5 Mass Serialization

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I) Bar Codes. These are high-density linear or 2 dimensional bar codes incorporating product identity down

to unit pack level, which are scanned and referenced to the central database. One popular implementation

is the 2D data matrix code, and other possibilities include PDF417 codes. A 2D code can typically be 1cm

square or smaller and yet contains up to 1 Kb of data with some "redundancy" or error correction. Where

space is not a limitation, linear bar codes may also be used. The codes are printable by on-line methods

including inkjet or digital printing, allowing direct computer control and transfer of records to the central

database. Hierarchical systems are developed whereby the label on a shipping case is inextricably linked to

the identities of all its contents, and this can further extend up the chain to pallet labels, thereby

overcoming the necessity for line of site scanning through the supply chain.

ii) "Nano-printing" substrate technologies allow microscopic application of UV inks allow invisible printing

onto any substrate including glass vials and ampoules.

Pic: 6 Nano-prints on substrates

iii) "Nano-printing" product technologies allow microscopic application onto individual tablets.

Pic: 7 Nano-prints on tablets

iv) Radio Frequency Identity (RFID) Tagging. An RFID tag comprises of an antenna with a microchip at its

centre. This contains item- specific and batch information which can be interrogated at a distance, and

without requiring line of sight (unlike bar codes). The radio frequency used determines the range and

sensitivity, but no one specification suits all applications. Some systems are able to capture multiple

records for a mixture of different products, but there are some issues around orientation of the tags and

absorbance of the radio signal by liquids and foils. But one clear advantage of RFID is that it has the

potential to be fully automated in warehouses and even through to pharmacies, without requiring manual

intervention. Specifications for equipment and data standards are being developed. The cost of tags

remains a significant barrier to individual pack application, as does the availability of the application and

verification equipment if it is to be implemented to pharmacy level. Robustness of the tags during

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

© Confederation of Indian Industry 18

application and handling through to end of life is another issue, as trials to date indicate a significant failure

rate. However there is optimism that a printed version may be developed. Privacy issues and susceptibility to

deliberate adulteration must also be addressed prior to widespread implementation.

Pic: 8 RFID Tags

v) Unique surface marking or topography. There are several methods for applying a pseudo-random image

to each item in a batch, such as a pattern of lines or dots in one area of the carton, and then scanning the

signature into the batch database via secure algorithms, for later authentication. Alternatively, the pack

surface provides a unique fingerprint when scanned by a dedicated laser device, which enables each pack

to be registered into the database at batch manufacture, and which is impossible to replicate or falsify.

Unique pack serialization has the potential to deliver robust solutions to fraud and counterfeiting of

pharmaceuticals, but is not yet fully developed. Barcode systems use proven existing technology, but lack

the advantage of automation and remote scanning possible with RFID. But RFID systems are not yet

proven or robust, and standards need to be agreed and defined. RFID tags may be vulnerable to deliberate

and invisible alteration or corruption.

D.2 Auto Identification systems.

Smart packaging or auto identification systems are defined as small inexpensive label or tags that are attached

onto primary packaging (e.g. treys, pouches bottles) or often onto secondary packaging(e.g. shipping

containers) to facilitate communication through-out the supply chain for safety enhancements. Auto 19identification systems as per Ustandao are classified as optical character recognition (OCR), barcode system,

chip cards, biometric systems and RFID as shown in Fig.6.Data carriers such as barcode labels and RFID tags are

used to store and transmit data. Packaging indicators such as time temperature indicators, gas indicators,

biosensors are used to monitor the external environment and whenever appropriate issue warnings.

Pic: 9 Auto Identification of tags and barcodes with scanners, readers and phone

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19

on Computers and Industrial engineering,2065-2070

Ustanso A.(2005).RFID technology: A Paradigm shift in business Process,35th International conference

Fig: 6 Classifications of auto identification systems

5.2 EXISTING TECHNOLOGIES: OPTIONS

The current numbers of anti-counterfeiting solutions are many and new options are introduced in the market

with some variations. An attempt is made to classify the technologies as shown at Fig-7, for easy understanding

and comparison for their applications on product packaging.

Fig: 7 Classification based on current Technologies

A.RFID. Radio Frequency identification is hardly a new concept. For some, RFID is already a mainstream

technology-it is used everyday to pay tolls, secure building access, catch shop lifters etc. It allows identification

of objects through a wireless communications in a fixed frequency band. Three essential components in any RFID

system are: the tag, the reader and the software. The tag is an Integrated circuit containing a unique tracking

identifier, called an electronic product code (EPC), which is transmitted via E.M. waves in the radio spectrum. The

reader captures the transmitted signal and provides the network connectivity between tag data and the system

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© Confederation of Indian Industry 20

software. The software can be tailor made for the purpose of anti-counterfeiting. For their use on Packages and

LSCM, probably Wal-Mart becomes the pioneer. For their track and trace usage, RFID tags are used in different

ways:

a) Passive tag: When RFID tag is within the interrogation zone of the reader (i.e. interrogator) equipment;

sufficient power is extracted from the interrogator to power up the tag or circuit, or a special reflective

material. It then responds by transmitting data back to the interrogator.

b) Active tag: Such tags incorporate a battery to increase range for collating data, tag to tag

communication, etc. But these are much more expensive.

c) Semi-active tag. In these tags battery is used to back up the memory and data, but not to boost the

range. With some active RFID tags, the battery is only used when interrogated or when sending a homing

pulse at fixed intervals to reduce cost and size.

B. Packaging design: Materials/Substrates and other design options

a) Substrates. There are variety of substrates used in the design of packages with intent to provide

counterfeit and tamper evident features starting from litho paper, polystyrenes, destructive vinyl’s, acetate

films synthetic paper and coatings etc. There are many ways of incorporating covert markers within a

substrate, such as visible or UV fluorescing fibers, or chemical reagents in carton board or paper.

Watermarks can be embedded in leaflet paper, or metallic threads interwoven in the base material,

possibly including an overt OVD feature. These require a dedicated supply source and large volume

production, which, if affordable, results in a very effective option. Odor. Micro-encapsulated distinctive

odors can be applied as an additive to an ink or coating to provide a novel covert or semi-overt feature as

well as sound chips creates special opportunities in the design.

Pic: 10 Special grade of paper used as label stock

b) Packaging designs like sealed cartons, aerosol containers have inherent strength against counterfeiting

c) Sealing systems. Special caps as the outer tamper evident system or the foil seal offers that offer an

internal tamper evident feature are commonly used for processed food and FMCG products. Sealing

options are:

a) Induction. A process where heat is applied just where needed, around the edge of the aluminum foil

inner liner. As a sustained downward pressure of 50-150 phi) is exerted on the cap, an electronic

b) Conduction Foil closures are stamped from a roll of foil/polymer laminate and fed into the chute.

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c) Lever-lidded tins. The pilfer resistance of lever lidded metal containers can be dramatically improved

by the inclusion of a tagged foil diaphragm which can be formed into the lid assembly prior to

attaching to the can body.

d) Secure Packaging Tapes: A simplest features providing Tamper evident and theft protection at the

level of secondary packaging, boxes and logistics containers. The secure packaging tape is equipped

with a highly aggressive adhesive and features a unique design. The continuously varying serrated

edge, rhombic pattern and semi-transparent finish indicates clearly that tape has been cut through

and pasted over again.

e) Tear tapes/ bands: These provide excellent features at the levels of transport or the secondary packs

Pic: 11. Tear tape applied as a security feature on a corrugated box.

f) Lined cartons. As an efficient replacement for secured containers like the metal cans, these packs

have the internal flexible liner and the external semi rigid paper carton. However as a security feature

the liner carton is attached to the paper carton during manufacturing stage on special machines and

thereby product filling is done directly on the special filling lines.

Pic: 12. A liner carton

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C. Security labels: Construction and substrate features

Tamper evident and security labels play an important role in providing some relief to the consumers against

fakes. In Self Adhesive Labels the substrate mostly performs as a complimentary interaction of the substrate and

the pressure sensitive adhesive. While passive security labels have been extensively used today one can find a

greater application of functional labels such as printing plus EAS serving as anti theft. Some label options are:

a) Paper labels with Security Cuts: The substrate used for these labels is ordinary coated/uncoated paper.

The security features are built in by the label printer at the converting stage. With the help of a special

cutting die the face material is given cuts at various angles so that any way one tries to remove these

labels the paper will tear off. A general purpose permanent adhesive works fine with such labels. Care is

taken to ensure that the adhesive will adhere well and firmly to the surface on which the label has to be

applied.

b) Destructible Labels: Needs a special substrate designed for the purpose. Most of the high-end

applications use a specially made Cellulose Acetate film. The film is very intricately designed that it has

adequate strength to undergo conversion into Label stocks in roll form. It is available both in clear and

opaque formats. This is further converted into labels using aggressive pressure sensitive adhesives. These

labels can be automatically dispensed on automatic label dispensers. These labels when attempted to be

removed, break up into very small fragmented pieces. These days' cost effective vinyls are being used

instead of the Acetate film. There is also development on this front using a combination of various

synthetic polymers such that the end substrate has very low inherent strength.

c) Void Labels and Tapes: These are perhaps the most important of the tamper evident security labels. These

substrates have text built into them and when as a self adhesive label they are removed, they exhibit the

word VOID both in the removed film and the adhesive layer left behind. These substrates gain importance

since there can be customization built into the labels produced with it. One can use polyester or BOPP as

face materials. Variety of colors, even metallization is possible. The text VOID could be replaced by the

customers brand, emblem or a message, which would normally be invisible till the label is opened. Due to

the versatility of things that can be done with the product, these label substrates have found widespread

usage worldwide. However in India the volumes still need to pick up. This perhaps can be attributed to the

cost cutting measures always haunting the marketing managers. These substrates can even be designed to

work as tapes for the final outer corrugated cartons to prevent pilferage.

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Pic:13.Void Label leves mark when tampered/removed

d) Self destructing paper label: These labels are very similar to destructible labels mentioned earlier. Only in

this case the substrate used is a very weak strength paper of low grammage. This paper is also heavily

loaded with fillers creating a weak and brittle paper. Labels made from such papers fragment into pieces

when attempted to be removed. However converting is a very tricky issue when using these substrates due

to the lack of strength. These papers are very difficult to source as most of the paper mills are trying to

develop papers that are very high in strength. This goes against their target specifications.

e) Holographic labels: These labels form a very large and important part of the security label market and are

an ideal choice for product authentication. The holographic foil that is an optically variable device is

largely made using a polyester film base. The optical interaction of the holographic image and the human

eye makes it ideal for brand promotion and security. These products reveal the holographic image when

tilted in light. The image so revealed can be customized to the need of the brand owners to make the

maximum impact. The hologram production involves development of complex origination process and a

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lot of innovation to make it difficult for counterfeiters to duplicate. Many holograms are designed such

that besides offering brand authentication they also have tamper evident properties. The top polyester

layer has a special coating that if the hologram is attempted to be removed, the top layer peels off leaving

the hologram behind on the product.

Pic:14. Holographic Labels -options

f) Multi layered labels: The face stock of these labels is laminates of different substrates depending on the

requirement of the security label. These can be film to film or film to paper or other coatings. Here the

layers are designed such that on separation they either exhibit tamper evidence by way of a one layer

getting fiber tear or by complete separation and exhibiting a design or message. The various layers are

bonded together by adhesive or heat seal coatings depending on the requirement of the design of the

label. This segment of substrates can be vast and can be designed to the requirements of the user and can

go on offering variants as per the imagination of the designer or producer.

g) Transfer labels: The substrate in this case consists of either BOPP or Polyester. The film has a release coat

over which the matter is printed and then adhesive coated. Such labels when applied and peeled off, the

clear top layer comes off leaving the printed matter behind. This can also be designed such that some

printing is subsurface and remains behind and some printed matter is on the top and comes off with the

top layer.

h) UV fibers in paper: Here the substrate is paper and the security is built in at the paper mill during the

paper making process. UV light sensitive fibers are incorporated into the pulp and evenly distributed in

the paper. When Labels made from such paper are exposed to UV light, the fibers glow indicating the

genuineness of the labels. The volumes required for these substrates have to be large enough to allow the

paper mill to produce a batch full of pulp that would eventually be converted into paper for security

labels. The color of the fibers can be selected as per the wish or need.

i) Security threads: Thin micronic threads are introduced in the substrates either at the label stock making

stage or they are separately built into two layers of paper laminated together. These threads can also be

sensitive to UV light. These will glow under UV light. Most people are aware of this security as it is a part

of our currency notes.

j) Water Mark: These are marks that you can see as an image in the paper when you hold it against light.

These are also built into the paper at the paper making stage in a paper mill. Again here the volume has

to be large enough to justify incorporating the markings in the paper making process. However some

converters do print these with inks where security requirements are not of a very strict nature.

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Pic:15. Digital Water Mark -options

k) RFID: Radio frequency identification remains the most interesting development in security labels in recent

times. Basically the micro chip has to be placed under the label and programmed. The uses of such labels

are diverse. As for security, unbilled items attempted to be taken out of the exit gates would trigger off

security alarms. The technology to implant the RFID chip into the self adhesive laminate is quite diverse

and fast changing. A multilayer laminate where the top layer is paper and the chip is sandwiched between

the top layer and foam is adhesive coated and laminated to a release liner. The foam in the laminate

provides a flat surface for printing on top as otherwise the printing would not be possible on the uneven

surface formed as a result of insertion of the chip. There are others who delaminate the label stock and

place the RFID chip and relaminate, this is done in line as part of the label printing and converting

process. It is a matter of time when substrates with chips in-built into them will be commercially available

for label stock producers to use just as they use ordinary paper or film. As of now the cost at the entry

level into this field is prohibitive for smaller players as the technology and equipment are too expensive

and changing very fast.

l) Barcodes, Consecutive and sequential numbering, Labels with DNA inks, Labels with

Micro Taggants, Security Inks: These are processes that are not a part of the basic construction of the

substrate of security labels but they are put on the label during the label printing and converting process.

Barcodes for instance, most of us recognize as a band of black vertical lines of varying thickness. These

barcodes have a whole lot of information built into them. It is a regular accepted fact now that most of

the retail stores use these for billing, accounting, inventory control, logistics, etc. For barcodes to be

effectively printed, substrates need to be given primer or basecoats that will facilitate proper printing of

the barcodes and their sensing by the sensors reading and transmitting information to the computers. It is

unfortunate that the rhetoric created for the RFID coming in, has left the trusted workhorse barcodes in

neglect. The bar code failure rate is almost zero compared to the 5-12% of RFID.

Consecutive and sequential numbering is again done as a part of the label printing or finishing process.

This does not provide a very high level of security. In fact it is generally used as a security enhancing

process. A label that has other security features is given this numbering to further enhance the level of

security. One of the biggest users of this process is the state excise departments who apart from having

various security features in their seals also number them in an evident effort to keep a track on the labels

in the supply chain.

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When we talk of labels with DNA features, these are DNA-embedded biotechnology security applications

using plant DNA. These are proprietary formulations and processes and can be verified by laboratory DNA

analysis. This is used for very high level of security and anti counterfeiting measures. Micro-taggants are

microscopic Identification Particles that are traceable and play an important part in anti-counterfeit

technology. Micro-taggants are highly versatile in their use and application. In basic form, Micro-taggants

are a unique numeric code sequence in a multiple colored layer format. In more complex forms, Micro-

taggants deliver multiple layers of security through the incorporation of several taggant technologies.

These can be used in inks coatings, adhesives and paper making. The simplest form of taggants can be

identified from their different colors. Other taggants can be energy sensitive, fluorescent, magnetic, etc.

Many printers also prefer to rely upon the security inks. These vary from the normal UV sensitive inks,

thermochromic inks, luminescent, fluorescent inks, etc. The UV sensitive fibers are available in various

colors and they glow under UV light even though they are invisible to naked eye. The thermochromic inks

change color with change of temperature. You could have a bottle of soft drink with a label that would

read,” Chilled!” when it is say less then 10 degrees and the words disappear when the temperature rises.

Alternatively a hot cup of coffee would provide a safety feature if the label showed, “HOT” when the

temperature rose.

The scope of security labels and brand protection solutions are wide and no, one solution can be a

permanent solution, and however the development and innovation does not come about due to

hesitation on the part of the users in avoiding to spend more. Sometime back Jet airways in Mumbai

undertook an exercise to upgrade their security labels that they use during baggage scanning. Though

many innovations were suggested but the airlines decided to stay with the simplest paper stickers with

security cuts as they did not want to pay more then what they were already paying. I was recently visiting

a large automotive spare parts manufacturer. I was surprised to note that one of the marketing people

actually expressed that I should suggest one security solution that would last them for a long long time

say five years. This is not possible as the counterfeiter works overtime to make duplicates and fakes and

continuous innovations are required to produce security solutions that become a deterrent for the

counterfeiters. Giving them so much time would make us fall into a trap facilitated by time we ourselves

give to the counterfeiters. Designing a security label needs application of mind, time and money. We have

to reconcile to the fact that providing security solutions is an ongoing process because looking at the

security label we can say that if someone can make it then someone can also fake it.

D. Coding, Printing and Graphics:

a) Coding and marking. For a long time regulatory compliance drove the need for coding and marking on

the packaged products starting with best before date. However, with increasing awareness and greater

printing and marking options like ink jet coding, laser coding and electrolytic etching for metal marking

on can decide their use to evolve an overall anti-counterfeit feature. These provide the opportunities for

online coding with flexibility, programmable options, time saving and low running costs. Depending on

the exact requirements one can go for the Touch dry contact coding, non contact coding or the

permanent laser coding etc.

Traceability and counterfeiting measures can be improved by using a variable data on the labels i.e.

to create unique marking of the packages, which can be made cost effective by using digital printing

technology for producing on demand short run packed products.

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Pic: 16. Ink jet coded bottle

b) Security graphics. Fine line color printing, similar to banknote printing, incorporating a range of overt

and covert design elements such as guilloches, line modulation and line emboss. They may be used as

background in a discrete zone such as an overprint area, or as complete pack graphics, and can be printed

by normal offset lithography or for increased security by intaglio printing. Subtle use of pastel "spot" colors

makes the design more difficult to scan and reproduce, and security is further enhanced by the

incorporation of a range of covert design elements, such as micro-text and latent images.

E. Holograms

Were used first for promotional purposes during 80's and saw a phenomenal growth by 1996.Probably the most

familiar overt feature is the "dove" hologram which has been used to protect credit cards for many years. A

hologram normally incorporates an image with some illusion of 3-dimensional construction, or of apparent

depth and special separation. Holograms and similar optically variable devices (OVD) can be made more effective

when incorporated in a tamper evident feature, or as an integral part of the primary pack (e.g. blister foil). They

can be incorporated into tear bands in over wrap films, or as threads embedded into paper substrates and hence

may be usefully employed on secondary/ transport packs. Several processes can be used to incorporate

holograms into packaging; flexible, folding cartons or bottles. Methods include pressure sensitive, shrink, or glue

applied labels; hot stamping; web transfer and lamination. Essentially selection options for the hologram are the

Image and Media. The right combination of the two components produces a successful anti-counterfeiting

marking that meets the desired objective.

a) Image choices are in the form of Parallex, 3-D perception, switching images, animated images, dynamic

color effects, micro text, fine line patterns, machine readable image, Hidden image readable through

special reader.

b) Media or the form of delivery has the choices: tamper evident, frangible, paper labels, induction wads,

shrink sleeves, hot stamping foils, aluminum foils, PVC films, Hologram tape/thread.

c) Optically Variable Devices (OVD): OVDs also include a wide range of alternative devices, similar to

holograms, but often without any 3D component. Generally they involve image flips or transitions, often

including color transformations or monochromatic contrasts. Like holograms, they are generally made up

of a transparent film which serves as the image carrier, plus a reflective backing layer which is normally a

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very thin layer of aluminum. Other metals such as copper may be used to give a characteristic hue for

specialist security applications. Extra security may be added by the process of partial de-metallization,

whereby some of the reflective layer is chemically removed to give an intricate outline to the image, as can

be seen on many banknotes. Alternatively the reflective layer can be so thin as to be transparent, resulting

in a clear film with more of a ghost reflective image visible under certain angles of viewing and

illumination. DOVID's (differentially optically variable image devices that can not be copied by electronic

means are being used in decorative packaging and brand enhancement with security. DOVID's are

generated through micro embossing, dot matrix mastering, photo resist interference, lithography, electron

beam lithography and classical holography.

d. Color shifting security inks and films: These can show positive changes in color according to the angle

viewing angle, and can be effective either as an overt graphic element or by incorporation in a security

seal. Color shifting pigments are finely ground metallic laminates which need to be laid down in a thick

opaque film to achieve the optical effect, and are therefore better suited to printing techniques such as

gravure and screen printing rather than lithographic printing. Their security value lies in the specificity and

dynamics of the color change (e.g. from blue to gold), combined with the difficulty and expense involved

in manufacture. They are only available from a limited number of pigment suppliers, via a few specialist

ink manufacturers. Positive authentication may involve forensic (microscopic) examination and embedded

taggants. Color shifting films have been used for security applications, involving multi-layer deposition of

thin films to build up a structure with unique diffractive properties, and vibrant color transitions. They can

be applied as security seals or tamper evident labels.

e) Sequential product numbering: Unique sequential numbering of each pack or label in a batch can make

counterfeits easier to detect in the supply chain. If printed visibly, it provides a semi-overt means of

authentication by reference to a secure database, because duplicates or invalid numbers will be rejected.

The main disadvantages of sequential numbering are that the sequence is predictable and easily

replicated, and end users require some means of access to the database. The more secure option is

serialization by means of a pseudo-random non-repeating sequence, and this is discussed in the Track and

Trace section.

f) On-product marking: On-product marking technologies allow for special images or codes to be

placed on conventional oral dosage forms. These overt technologies can be difficult to replicate and offer

a security technology at the pill level. This added layer of security is effective even when products are

separated from the original package.

g) Invisible Printing: Using special inks, invisible markings can be printed on almost any substrate, and

which only appear under certain conditions, such as via UV or IR illumination. They can be formulated to

show different colors with illumination at different wavelengths.

h) Embedded Image: An invisible image can be embedded within the pack graphics which can only be

viewed using a special filter, and cannot be reproduced by normal scanning means. The effects can be

quite dramatic, and yet well hidden.

i) Digital Watermarks: Invisible data can be digitally encoded within graphics elements and verified by

means of a reader and special software. The data can be captured using webcam, mobile phone or other

scanning equipment, but the digital information is not visible to the human eye, and attempts to replicate

it will be detected by virtue of the degradation of the embedded data.

j) Hidden Marks and Printing: Special marks and print may be applied in such a way that escapes attention

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and is not easy to copy. Their effectiveness relies on a combination of secrecy and subtlety.

k) Anti-copy or Anti-scan design: Fine line background patterns appear as uniform tones, but when

scanned or copied reveal a latent image which was not previously visible. Commonly used on secure

documents to prevent photocopying, they may be applied to product packaging as a background tint.

l) Laser Coding The application of batch variable details by lasers coding requires special and expensive

equipment, and results in recognizable artifacts which may be difficult to simulate. Laser codes can be

applied to cartons and labels, and plastic and metal components.

F. FORENSIC Markers

a) Chemical taggants. Trace chemicals which can only be detected by highly specific reagent systems, but

not normally detectable by conventional analysis.

b) Biological taggants. A biological marker can be incorporated at extremely low levels (parts per million or

lower) in product formulations or coatings, or invisibly applied to packaging components. At such low

levels they are undetectable by normal analytical methods, and require highly specific "lock and key"

reagent kits to authenticate.

c) DNA taggants. Highly specific DNA "lock and key" reagent systems can be applied to packaging by a

variety of printing methods. They require a "mirror image" recombinant strand to effect the pairing, and

this reaction is detectable by a dedicated device. Security is further assured by hiding the marker and

reagent pair in a matrix of random DNA strands, but the test is tuned to work only with one

recombinant pair.

d) Isotope ratios. Naturally occurring isotopes can be highly characteristic of the source of a compound, and

accurately determined by laser fluorescence or magnetic resonance techniques. These can provide a

"fingerprint" of one or more of the product constituents, or alternatively a specific marker can be added

with its own unique signature. Detection requires highly specialist laboratory equipment.

e) Micro-taggants. Micro-taggants are microscopic particles containing coded information to uniquely

identify each variant by examination under a microscope. This may take the form of alphanumeric data

depicted on small flakes or threads, or of fragments of multicolored multilayered laminates with a

signature color combination. These can be embedded into adhesives, or directly applied to packaging

components as spots or threads.

f) "Nano-Printing" technologies allow microscopic application onto individual tablets. UV inks allow invisible

printing onto any substrate including glass vials and ampoules and provide an excellent security.

G. Mass Encoding

Individual products are encoded in an overt manner either through a barcode or a human readable form. Coding

therefore becomes the essence in design process. Encoded products need the support of software solutions that

permit product tracking through the various nodes in the LSCM operations. Options adopted for encoding are:

a) Barcodes: Barcode is a series of parallel, adjacent bars and spaces used to encode the small string of data.

2-D codes are also available now with possibility to encode large amount of information that makes it an

option for anti-counterfeiting. Bar-coding when used with GS-1 standards, permit universal and unique

identification of goods, services, assets etc. A bar code reader (scanner) decodes the bar code using

intensity of the light reflected. While Package printing gives emphasis to product appeal and acceptance

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by the consumer, barcodes captures the specific information that may contain information related to track

and trace traceability, inventory management, security, identification etc. Bar-coding provides the means

for automatic data capture of information. When used with international numbering standards, it permits

universal and unique identification and security of packaged products. Barcoding works essentially with

the optically scanning devices e.g. for the UPC bar code scanners use a helium neon (red) laser emitting at

660 nanometers to determine the contrast between the reflected light from the dark bars and light

spaces. For their use as a system they also need the decoders, software's for coding. Universally GS-1

barcodes provide an access that could operate with countries/users who are the members of GS-1.

However, due to some specific reason many retail chains use their proprietary codes. Use of barcodes as

anti counterfeit option is attempted especially with the possibilities to go for 2-D codes.

Pic:17. 2-D barcode Pic:18. A barcode

b) Digital mass serialization (DMS). The technology includes the generation of a random, pseudo random

code in a sequential manner by the technology provider entered into their or the customers data base for

later verification. These codes are provided to customers who in turn can apply them in different ways.

These codes can be printed on the labels and then affixed on the product or can be used in a covert way

on a pack. The authentication process involves matching the unique code on a product to those stored in

the data base. If the code is present in the data base, then the then the product is authentic. This

technology needs to be integrated with proper protocols and SOP's for its success with security features to 20

its data base since it could be the weakest link in the technology .

c) Digital Mass encryption (DME). In all respects it is similar to the DMS except for the way code is 21generated. In this process encrypted codes (defined) are produced by a cryptographic algorithm. These

codes themselves do not carry or contain any product or logistical information. No need for maintaining a

data base is also envisaged in this system.

H. Surveillance Technologies. Systems which can give signals when products are being stolen form part of this

technology. Three main technologies used for electronic surveillance are;

a) Radio frequency

b) Acoustic-Magnetic

c) Electro-magnetic

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20 Generic drug industry in India; the counterfeit spin.Nitin Shukla and Tanushree Sangal Journal of IPR

Vol 14,May 2009,pp 136-240

21 Wikipedia

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22 The future of Global Packaging. Pira international ltd./WPO 2005

World Forecast for brand protection by healthcare industry

Packaging is a major aspect of differentiation in most consumable goods; where differentiation competition is

intense then prices are low, and packaging provides a marketing advantage at the point of sale. Packaging is

also a major cost component in the majority of consumable products. For example, 48 cents out of every dollar 22(48%) of coke's product cost is from packaging of the total market, 60% lies in the areas of primary containers

and flexible packaging-the containers and wrappers that give immediate protection to the packaged product.

Along with the key trends for the brand enhancements that includes printing, high quality graphics and the

design features; demand for security features including anti-counterfeit and tamper evident design is gaining a

huge interest of brand Managers. Data presented at Table 3 indicates the importance of each technology in

value terms as well as the CAGR indicates the interest that is shown in the development and use of RFID

technology.

Table: 3. World Forecast market for Brand security by technologies 2005-12 ($ million)

Security features 2005 2006 2007 2012 CAGR %

2007-12

DOVID’s 1018.9 1128.3 1263.5 2041.8 10.1

RFID 82.2 95.1 109.9 415.1 30.2

Taggants 396.7 453.7 526.2 963.4 12.9

Security inks & coatings 930.0 1038.6 1176.9 2235.0 13.7

Security substrates 800.0 868.9 955.8 1419.6 8.2

Security printing 1066.7 1145.4 1240.0 2328.3 13.4

Total 4530.0 5005.6 5597.3 10086.6 12.5

Note: includes Data-matrix & 2-D barcodes, track and trace protection, watermarks etc.

Source: Pira International Ltd.

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5.3 NEW PACKAGING TECHNOLOGIES: OPTIONS

One of the key analyses of the package system on a pharmaceutical product is the simplicity of printed matter

particularly on the lidding foils used in a unit dose blister pack. The printing technologies employed are

conventional and hence it is very easy for an imitator to get a similar printed lidding material without much

effort. Secondly, the print inputs do not encompass a blend of technologies which can enable a considerable

level of deterrence for an imitator to wrongfully duplicate an original product. The new packaging technologies

are targeted to challenge the counterfeiter’s convenience and create a capability of print matter which can

provide overt, covert and ultra-covert security features more specifically detailed as below:

a) Complex graphic image printing on aluminum (lidding foils, cold-formable foils), paper and other

substrates used for unit dose packaging of Medical Products

Pic:19. Complex graphic image printing

b)Metallized substrates with unique color options – capability for secure and distinctive overt

brand security

PVC based blister forming film having a precise amount of metal deposition providing a classic metallic

appearance. The metal layer on the PVC film and / or the second surface of the PVC substrate is further coated /

laminated with specialty color lacquers, barrier polymer coatings and /or additional polymer films to create a

unique and distinct multi layered metalized film.

Pic:20. Metallized substrate with unique color options

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c) Image embedded on transparent or metallized substrate – capability for secure and distinctive Overt

brand security

The metallized substrate is subjected to a unique process which includes employing a unique differential grating

methodology resulting in creation of unique, non replicable visual effect in the from of image / pattern over the

metallized surface.

Pic:21. Image embedded on transparent or metallized substrate

d)Color shifting graphic printing – capability for distinctive overt brand security

The viewing angle-dependent color shifts by changing the viewing angle of the ‘security spot’.

e) Micro-text printing – An Overt-Covert security feature for brand security

High clarity micro-print text on various substrates like lidding foils, paper and cold formable foils, which is

legible under naked eye and on magnification.

Pic:22. Microtext print

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f) Interference graphic print – with complex print details visible on magnification – An Overt-Covert

security feature for brand security

Pic:23. Interference graphic print

g)Forensic print through specific secure traceless markers read by specialized devices - An Ultra-Covert

security feature for brand security

A printed Aluminum lidding foil embedded with invisible markers that are visible only under highly specialized

proprietary devices and capable of highly secure forensic ultra-covert measures against counterfeiting.

Pic:24. Forensic print

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h)Product Authentication cum Track-n-Trace

A tamper evident nanotag label comprising a unique fingerprint integrated with any universally used overt

systems like barcodes/ RFID tags etc. that can be authenticated with the help of a secure reader which can scan

the encrypted image through any universal mobility platform like GPRS / 3G / Broadband to a secure fingerprint

server and authenticate as well as track-n-trace any product. This technology is capable of being integrated with

any existing identity and supply chain management system such as Barcodes, RFID and their likes to achieve

tailored graded levels of security.

Pic:25. Product Authentication cum Track-n-Trace

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6. COMPARISON OF CURRENT ANTI-COUNTERFEITING TECHNOLOGIES

Most companies with no ability to look at their continual sales adopt anti-counterfeiting strategies to meet their

sporadic sales and in no time realize that the adopted technology has failed. Possibly the failure was due to the

fact that they never worked with strategies. They took the tactical solutions which were short lived. First and

foremost requirement of any company with serious intentions of going for anti-counterfeit solutions for their

products is the need for strategic marketing orientation. The orientation that will make the company look at

their brands and the anti-counterfeit choices within the LSCM as already discussed at Section 2. In addition with

the packaging paradigm already discussed earlier it must be kept in mind that any technology adopted will have

a strong influence of factors related to market geographical locations, regional social dimensions, customers

profile/habits and finally the security of the LSCM operating for the product. It must be understood that

choosing a technology is a complex process. While not making any specific choices for the industry, general

comparison of technologies with known features is attempted as given below and should be considered only for

the guidance.

6.1 COMPARISON: PRODUCTS BASED ON END MARKETS

It is well known that the creation of pharmaceutical brands is a very expensive business as such there is a wider

choice of technology options. On the other hand a branded product like packaged drinking water with mass

consumption and huge volumes viable options could be simple.

Table: 4. Choice of anti-counterfeit technologies based on end markets needs.

RFID in Packaging: Applications with system range

End Market Trend Implications Potential Solutions

Pharma High priced prescription

drugs forcing consumers ~45% of drugs bought outside Anti-counterfeit, tamper

to seek lower priced options US are counterfeit. evidence and/or RFID

via internet traceability @ minimum cost.

Food Increasing concern with Prevent: Tamper band Seals

keeping food unspoiled Package failures. Tamper Evident Closures

and safe to eat. Product tampering. Shrink Sleeves

Bioterrorism. Product Coding

RFID Case & Pallet

Freshness Indicators

Beverage Trade Diversion Tamper Evidence and Over-the-cap closures.

Product Authentication Shrink Sleeve. Track and

is increasing packaging trace SCM operations

features.

Consumer Counterfeiting Brand Integrity Loss Ultra -destructible vinyls.

Durables Theft Revenue Loss Polyester VOID labels

Holograms

Security Printing Inks

Increased risk of counterfeit. Secure Supply Chain

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At Section-5, table-3, a CAGR of 30% on RFID use is forecasted for the year 2005-2012.Clearly RFID is the

technology of choice in the future to combat counterfeiting. A comparison as a function of range that indicates

their use at the individual product level or during the SCM is made at Table.5.

23Table: 5. Packaging applications as a function of typical RFID range employed .

6.2 TECHNOLOGY COMPARISON.

Authentication technologies. Authentication technologies include measures such as color shifting inks,

holograms, fingerprints, taggants, or chemical markers embedded in a drug or its label. The use of one or more

of these measures on drugs, starting with those considered most likely to be counterfeited, is an important part

of an effective anti-counterfeiting strategy. Because counterfeiters will adapt rapidly to any particular measure

and because the most effective measures differ by product, the most effective use of authentication technology

will vary by drug product over time.

Certain general conclusions on various technologies and options discussed earlier are made in the tabular form

below:

Table: 6. Advantages /disadvantages overt technologies.

Max range

(meters) Example

40 microns Touch outside of paper Anti-counterfeiting and Read or read/ write. Usually

packaging to sense tag tracking disposable tag or fitted for

inside(like a banknote stripe) life. Passive

A few Retail products tag like a Track and trace, EAS, and —

centimeters. label anti counterfeit

1 meter Automatic sorting of air Track and trace security status —

freight and courier parcels, updates

e.g. tag like a small label

Upto 100 Location of large crates, etc — Read only. Reusable tag

meters (large heavy tags needed) Active

Applications Purpose Mode

23 RFID in Packaging, Dr Peter J Harrop.p-23

Advantages Disadvantages

User verifiable Require user education — not always widely understood

Newer technologies more secure May be easily mimicked

Can add decorative appeal May add to cost

Can be a deterrent to counterfeiters May rely on covert features for authentication

— May be re-used or refilled

— May give false assurance

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Overt features represent an attempt to put authentication into the hands of the general public. However, to be

effective they demand public education and awareness, which is especially difficult in the most challenged

developing markets. It should also be noted that the more widely used one overt security technology becomes,

the more attractive it is for counterfeiters to defeat it.

Where overt features are used, experience is often that counterfeiters will apply a simple copy which mimics the

genuine device, sufficiently well to confuse the average user. They also require utmost security in supply,

handling and disposal procedures to avoid unauthorized diversion. They should be applied in such a way that

they cannot be reused or removed without being defaced or causing damage to the pack — otherwise genuine

used components may be recycled with fake contents, giving a false impression of authenticity. For this reason

an overt device might be incorporated within a Tamper Evident feature for added security.

Table: 7. Advantages /disadvantages Covert technologies.

Covert features are most effective in the hands of industry specialists. They are a very valuable investigative tool,

but a counterfeiter will be able to copy many of the simpler features unless they are skillfully applied and their

details are kept secret. However, there is almost unlimited scope to the possibilities, given imagination and

ingenuity on the part of the technologist and designer, and the costs can be minimized or even eliminated when

applied in-house. In-house application also has advantages of limiting involvement of third party suppliers, who

may not be trustworthy in some environments. Only the most secure covert features can be safely used in an

overt context, and these generally come under the next heading of forensic markers.

Table: 8. Advantages /disadvantages Forensic technologies.

There are some very robust and secure options available, which may enable their use to be more widely known

and therefore accessible to trusted authorities and investigators. However, these tend to be subject to patent

protection and therefore restricted in availability and pricing.

Advantages Disadvantages

Can be simple and low cost to implement Need strict secrecy — "need to know”

Needs no regulatory approval If widely known or used, may be easy to copy

Can be easily added to or modified More secure options add supply complexity and cost

Can be applied in-house or via If applied at component suppliers, greater risk of

component suppliers compromise

Advantages Disadvantages

High tech and secure against copying Licensed technologies usually limited to one source

Provide positive authentication Significant cost

May be disclosed for overt purposes May be difficult to implement and control across many

markets

Wider use increases risk of compromise

Unlikely to be available to authorities or public

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Table: 9. Advantages /disadvantages Serialization and Track and Trace technologies.

A number of Track and Trace applications are under development which are sector specific. The most obvious

benefits are in the supply logistics, where greater transparency of inventories and demand patterns can lead to

efficiency improvements and cost reductions. Another benefit is the ability to identify a product through to

dispensing to the patient, enabling the elimination of medication errors and the ability to speedily recall

defective product batches. But the ability to tightly control and authenticate all products through the supply

chain greatly reduces the possibilities for counterfeit, stolen or diverted product entering the distribution system

without being detected. It should also be noted that Track and Trace tags or labels may not necessarily be

applied at the unit pack level, but may be restricted to whole cases or even pallets — thereby affording the

logistics benefits but not all the safety and security gains. As has been mentioned before, a key security element

lies in pack serialization.

6.3 CHOICE OF ANTI-COUNTERFEIT SOLUTIONS WITH DIFFERENT LEVELS OF PACKAGING

Table: 10. Anti-counterfeiting technologies favorable at different packaging levels.

Advantages Disadvantages

High tech and secure against copying Significant cost to implement and monitor

May be capable of remote authentication, Difficult to implement across multiple markets

via phone or internet

May be accessible to authorities and May be vulnerable to hackers

investigators without compromise

May eliminate dispensing errors Damaged labels may not read

Facilitates recall of defective product Robustness of RFID tags not proven

May combat theft and fraud Needs harmonization of standards

Benefits in supply efficiencies Not accessible to the public

Remote reading causes privacy issue

Anti-counterfeit

technologies Primary Secondary Transport Unit load Parts of pack

Sales pack Group pack pack

Packaging design Yes No No No No

Printing & graphics Yes Yes No No No

Labels Yes No Yes No No

Tamper evidence Yes Yes Yes No No

Forensic markers Yes No No No Yes

RFID Yes Yes Yes Yes No

Track & trace Yes Yes Yes Yes Yes

Levels of Packaging

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

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7. ANTI-COUNTERFEITING STRATEGIES

7.1 ANTI-COUNTERFEITING BUSINESS STRATEGY - A MUST

As already discussed in Section-2, strategy needs to be for long term benefits, should have a broad scope and

operate at a higher level in the corporate hierarchy with an ultimate aim to maintain a competitive advantage. For

example, seizing 2 million counterfeit parts keeps that product out of the marketplace, but did it do more than

just temporarily disrupt the counterfeiters' cash flow? It is opined that a company can identify its ability to

compete and accordingly should look at creating anti-counterfeit protections at each of the five primary links (

inbound logistics, operations, outbound logistics, marketing and sales, services) and four supporting structures

(infrastructure, human resource management, technology development and procurement). All this with

considerations from social set up and consumer habits, infrastructure available and the overall environment for

conducting their business.

With the three identified components i.e. the criminal, the victim and the opportunity a “crime triangle” possibly

offers a best frame work to formulate the company's strategies developed within a framework of a detailed,

integrated process consisting of several equally important steps. These include:

a) Analysis of company's counterfeit and diversion problems and prioritize to uncover the weakest link in the

supply chain, complemented by identification of both internal and external problem areas like products,

regions and channels etc.

b) Development of technologies and various control mechanisms best suited for the theft problems in

question, including development of specialized programmes for contract manufacturers and franchise brands.

c) Deployment of a plan, designed by company's supply chain management team, to ensure that every aspect

of the customers programme is implemented smoothly to effect the desired changes. An important

component of this step is development and implementation of established metrics/standards by which to

measure programme effectiveness. This can be done through field surveillance, data collection and feedbacks.

7.2 UNDERSTANDING OF LEVELS OF PACKAGING FOR THE PRODUCT

Each product depending on its characteristics has a specific design need for its market success. Anti-counterfeit

options accordingly needs to be explored for the different levels of packaging as explained below:

a) Primary package is the first wrap or containment of the product that directly holds the product for sales. 24Identified as Sales Packaging

24b) Secondary package is a wrap or containment of the primary package. Identified as Group packaging

c) Distribution package (shippers) A wrap or containment whose prime purpose is to protect the product 24during distribution and to provide for efficient handling. Identified as Transport packaging .

d) Unit load. A group of distribution packages assembled into a single unit for the purpose of mechanical

handling, storage and shipping.

24e) Staples, sleeves, closures, labels are also identified as the part of packaging

24 As defined in European directive 2004/12/EC

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

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7.3 “BUILDING BLOCK” SYSTEM FOR ANTI-COUNTERFEITING

Such a system uses a single security precaution but a combination of security measures. The more the components

of use the harder it becomes for the counterfeiters. An anti-counterfeiting system that is designed for the primary

and secondary packaging of a product is shown at Pic uses the covert, overt and track and trace features.

Pic: 26.Combination of anti-counterfeit solutions

A heat sealed foil closure on a glass rim container plus a thermoformed or injection molded plastic overcap can show

a considerable cost saving over metal twist off or prize off lids. This is in itself an attractive consideration, especially

in the economic climate where margins are being squeezed, but the aspect of pilfer resistance and tamper evidence

is becoming increasingly important. Another example which is a combination of covert feature with Digital mass

serialization adequately supported by the communication network is the Mobile Product authentication technology

where Consumer has to simply scratch-off a code on the pack, send a text message through his/her mobile and

obtain an instant response through a numeric code number with an alert in case the code is fake.

Public education

Products packed in their primary or the secondary packaging comes in direct contact with the consumer at the

point of sales. Generally graphics and design govern the choice of purchase. Since today consumer is also health

conscious, if educated could become the most important link in the product authentication. Naturally it will

demand his education to compare a fake from the original. Some options are the Public service announcements

and new educational partnerships with consumer and health professional organizations, to help consumers avoid

buying counterfeits. Much greater efforts in enhancing the educational programs for pharmacists and other health

professionals about their role in minimizing exposure to, identifying, and reporting counterfeits in case of drugs.

Track & Trace

Bar Code.

Insert printed on

chemically reactive paper

with microfibers.

Hologram.

Microtext.

Clear varnish

coating with

taggants over

logo.

Hologram.

RFID tag inside

carton.

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

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8. CONCLUSION AND RECOMMENDATIONS

Compliance and security features are not a cost burden? Many, particularly in SME sector believe that anti 25counterfeiting measures are tough and costly .However, a research undertaken to see the value realization of

Indian grape exports since the time EU compliance on traceability is followed by the exporters indicate much

better value realization with respect to Indian Grapes in the last few years in particular. Thus by assuring safety

and quality through incorporation of anti counterfeiting operations to gain consumer confidence, manufacturers

can gain the competitive advantage in local and export business if actions are planned strategically.

Successful companies world over spend time and money in protecting their brands. The best defensive strategy is

to integrate very technique into distribution, record keeping system and also thinking strategically.

Some proactive government departments in India have also started mandatory use of GS-1 barcodes. Delhi state

excise department has mandated bar-coding for all IMFL sold in Delhi. The department needs to track and trace

the movements of stocks and sales of alcoholic beverages as they move through the supply chain from the

manufacturers down to the retail vendors to prevent theft and better tax collection.

As can be seen above, there is a huge range of possible solutions ranging from the very simple to the highly

complex, from zero cost to highly expensive and from fragile to highly secure against counterfeiting. The wide

range of options adds to the potential security by diluting the advantage gained by a counterfeiter in defeating

any one system, and manufacturers should choose widely and wisely for optimum security gain.

It is unlikely that any one solution will be appropriate for all applications - the costs may not be affordable in

developing markets, or for low margin products Effective protection against counterfeit products includes actions

by producers, distributors, and dispensers to secure their business practices such as ensuring the legitimacy of

business partners and refusing to do business with persons of unknown or dubious background, taking steps to

ensure physical security, and identifying an individual or team in the organization with primary responsibility for

ensuring that effective security practices are implemented. In US the wholesalers have already drafted a set of

secure business practices and FDA will continue to work with other major participants of the drug supply chain to

develop, implement, and disseminate such business practices, through such steps as issuing guidance and

supporting the development of industry best practices. To help ensure secure business practices, FDA intends to

increase its inspection efforts of re-packagers whose operating procedures place them at increased risk for the

introduction of counterfeit drugs.

Development of a system that helps in ensuring that effective reporting of counterfeit products to the designated

agency for rapid response to such reports is foolproof.

Counterfeit menace is a global challenge to all nations, and criminal counterfeiting operations are increasingly

operating across national borders. There will be a need to work with the World Organization, Interpol, and other

international public health and law enforcement organizations to develop and implement worldwide strategies to

combat counterfeit drugs. Collaboration with foreign stakeholders to develop strategies to deter and detect

counterfeit drugs globally is a good option.

Certain products like for drugs use is not restricted to highly developed and sophisticated societies, but is almost

universal. Therefore, not all areas share the same accessibility to technological solutions, and their supply

infrastructure. It is also noted that reliable and secure sources of supply may be wanting in some regions where

there is a poor history of intellectual property protection. Manufacturers may be confined to using only in-house

technologies in such territories.

25 Research undertaken by the author. Extract attached as an annexure.

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

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Because the capabilities of counterfeiters continue to evolve rapidly, there is no single "magic bullet" technology

that provides any long-term assurance of drug security. However, a combination of rapidly improving "track and

trace" technologies and product authentication technologies should provide a much greater level of security for

drug products in the years ahead.

Virtually all of the available solutions carry some cost and administrative burden, whereas the manufacturers'

business case for cost versus benefits is extremely difficult to quantify. This is not helped by many unsubstantiated

claims for the level of counterfeits in the global medicines market. The true business case is more realistically

based on risk management and corporate ethical responsibility for public health and safety, except in those few

areas where the counterfeit level is measurable.

Finally, there is no single solution to every problem, and a secure strategy will almost certainly involve a mixture of

technologies, often in combination. An overt feature will almost certainly include a secure covert element for

added security, and any one product may carry several different features on various levels of the pack and

components. But as long as counterfeiters target medicines for illegal profit, a product with no form of anti-

counterfeit marker represents a significant potential risk to public health and safety

In essence any anti-counterfeit technology should support the Brand through its identity, equity and the

protection as shown at Fig.8.

Fig 8 Brand triad.

BRAND

EQUITY

IDENTITY

PROTECTION

*COLOURS

*PACKAGE GRAPHIC

*PACKAGE SHAPE

*SYMBOLS

*LOGO TYPE

*BRAND NAME *PRODUCT AND BENEFIT

*DESCRIPTIONS

*BRAND LOYALITTY

*BRAND NAME AWARENESS

* PERCEIVED QUALITY

*BRAND ASSOCIATION

*BRANDPERSONALITY

*PROPRITERY BRAND ASSETS

THROUGH STRATEGICALLY CHOSEN ANTI-COUNTERFEITING TECHNOLOGY OPTIONS

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

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The ideal characteristics of a technology for delivering a 'full-proof' solution to multiple challenges that a

pharmaceutical product encounters, extend from identity to reliability of its origin. The salient features of the

'Technology-of-Choice' are:

• Should be NonClonableTM (Clone proof)

• Simple to use front end with high-tech back end.

• Consistency and accuracy

• Checks and verifications – at all points and at all times

• Empowering all stakeholders including the Enforcement Agencies to carry out real-time identity,

authenticity and track-n-trace.

• Capability of integration to existing processes

• Discerning features

• Ease of deployment

• Commercial viability

• Protection of Privacy

• Capable for use / integration to meet imminent and implemented needs (Patient compliance etc.)

A comprehensive End-to-End solution encompassing a hybrid of all current Anti-Counterfeit Technologies which

can help the pharmaceutical manufacturer in the following ways:

• Protect the brand and product from being miss-utilized by the counterfeiters. In turn help manufacturers to

prevent revenue losses and loss in brand image.

• Simple to use at the front end, the solution facilitates instantaneous authentication of product at any point

in the complete supply chain.

• The solution should empower the End-Consumer to check and identify the genuine product.

• The solution should enable the manufacturer to achieve comprehensive security blanket both at the

product level as well at the supply chain level.

• The solution should facilitate the manufacture to create e-pedigree of the product and help in

achieving compliance.

Recommendations

While all methods for anti-counterfeiting are known to have short lives and the solutions to defeat them, the

menace still must be dealt with. What is needed is an overall strategy to manage the counterfeiter's criminal

intent that reduces damage to brands and health of people, at an affordable cost. Clearly first objective is to

prevent the counterfeit operations. However, even after this has been done, counterfeits will still, be produced.

The second objective therefore is to make surveillance strong through public participation with adequately

deterrent punishments so that counterfeiter thinks twice before getting into this illegal activity. Some of the

immediate issues on the subject along with the proposed actions are placed at Table: 11.

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

© Confederation of Indian Industry 46

Table: 11. Recommendations.

All the actions must ultimately lead to an Integrated anti counterfeiting management system. To make the

programme successful it is necessary that IACMS designed is:

a) Market oriented. Any state sponsored scheme that incorporates material recycling, biological, thermal

treatment or any other technologies, must recognize that it is not enough that their outputs have a market

but also they must ensure their products are safe for use.

b) Flexible. An effective system will need the flexibility to design, adapt and operate its systems in ways

which best meet current social, economic and environmental conditions. In our country these are likely to

change over time and from State to State.

c) Suitably scaled. The need for consistency in quality and quantity of technology options, the need to

support a range of management options, and the benefits of economics of scale, all suggest that IACM

should be organized on a large scale, regional basis and with centralized command and control.

Consumer Education. Counterfeit menace is an issue which can be handled by the collective responsibility of

Consumers who use them, Business who create them and the Regulators who have the duty to prevent them. For

the success of any Plans, education programmes designed must consider following:

No. Issues Actions proposed Remarks

1 Authenticated data base on

anti-counterfeit market in various undertaken for getting the country thereby providing a base

end user sectors in the country magnitude and characteristics for policy interventions.

not available of anti-counterfeiting menace,

major areas of concern and the

existing system to handle such

a menace.

2 National policy on Counterfeits A clear concise and consistent This is a necessary requirement

and piracy management system national policy that is dove tailed for industry and other associated

across end user sectors is not with international policies of players to establish counterfeit

in existence interest with the participation of management system and make

all stakeholders necessary long term investments.

3 Policy action aimed at radically Studies on a framework for Necessary to ensure safe

strengthening anti-counterfeit promoting anti-counterfeit efforts consumption in the interest of

measures are not available and support for such programmes. the consumer and society.

4 Support to industry in carrying Form expert’s panel at national Any neutral body with no

out search operations with /state levels to make periodic preference or bias with the

adequate support from raids and report for legal/ involvement of prominent

DM’s/DC’s not available: administrative immediate actions Industry association could be the

best choice

Research study needs to be To validate menace within the

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

© Confederation of Indian Industry 47

a) Role of Consumers. Consumers have to assume the role of first inspector of checking the authenticity of

the product he/she buys and pays. Through adequate awareness and training if required.

b) Role of Business. Businesses that manufacture and use the relevant packaging and have the interest to

protect their valuable brands have to bear the obligation for making their consumers aware of the anti-

counterfeit features adopted by them.

c) Role of the Government. Government and regulatory bodies must draw up selective checking plans and

devise necessary measures for selective collection of packages in their local areas for authentication

followed by suitable actions. Increased criminal penalties to deter counterfeiting and more adequately

punish those convicted. Such provisions should provide an added deterrent to criminals who work to

counterfeit our citizens' medications. Criminal penalties need to be increased substantially and could be

based on the level of risk to the public health involved in the offense.

Anti-Counterfeit Packaging Technologies - A strategic need for the Indian industry

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Confederation of Indian Industry

The Confederation of Indian Industry (CII) works to create and sustain an environment conducive to the growth of industry in India, partnering industry and government alike through advisory and consultative processes.

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CII catalyses change by working closely with government on policy issues, enhancing efficiency, competitiveness and expanding business opportunities for industry through a range of specialised services and global linkages. It also provides a platform for sectoral consensus building and networking. Major emphasis is laid on projecting a positive image of business, assisting industry to identify and execute corporate citizenship programmes. Partnerships with over 120 NGOs across the country carry forward our initiatives in integrated and inclusive development, which include health, education, livelihood, diversity management, skill development and water, to name a few.

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